How to calculate food cost percentage — with a worked example in rupees
The food cost percentage formula, a worked example for a single dish and for a whole month, what a healthy figure looks like, and the mistakes that make it lie.
· 4 min read
Food cost percentage is the single most useful number in a restaurant. It tells you how much of every rupee a customer pays goes on the ingredients — and when it creeps up, it is usually the first sign that something is leaking: portions, wastage, prices or theft.
The formula
Food cost % = cost of the ingredients ÷ the selling price × 100
That is it. You can work it out for one dish or for the whole kitchen over a month. Both are useful, for different reasons.
Worked example: one dish
Say you sell a chicken burger for Rs 650. Its recipe uses:
| Ingredient | Quantity | Cost |
|---|---|---|
| Bun | 1 | Rs 35 |
| Chicken fillet | 120 g at Rs 1,100/kg | Rs 132 |
| Cheese slice | 1 | Rs 28 |
| Lettuce, tomato, onion | — | Rs 20 |
| Sauce | 30 g at Rs 600/kg | Rs 18 |
| Box and bag (takeaway) | — | Rs 25 |
| Total | Rs 258 |
Food cost % = 258 ÷ 650 × 100 = 39.7%
Two things to notice:
- The selling price should be before tax. If the menu price includes sales tax, take the tax out first, or the percentage will look better than it is.
- Packaging belongs to the order type. The box and the bag are spent on a takeaway or a delivery, not on a plate served at a table. Eaten in, the same burger costs Rs 233 and the food cost is 35.8%. If you only know one number for the dish, use the dearest.
Worked example: the whole month
For the whole kitchen you use what was actually consumed, which comes from your stock:
Cost of food used = opening stock + purchases − closing stock
| Rs | |
|---|---|
| Stock counted on 1 October | 380,000 |
| Purchases during October | 1,240,000 |
| Stock counted on 31 October | 410,000 |
| Food used in October | 1,210,000 |
| Food sales in October (before tax) | 3,450,000 |
Food cost % = 1,210,000 ÷ 3,450,000 × 100 = 35.1%
Ideal against actual — where the real insight is
The two calculations above answer different questions:
- The recipe figure says what your food cost should be: what the dishes you sold should have consumed.
- The stock figure says what it actually was: what really left the shelf.
The gap between them is the money that disappeared — over-portioning, wastage nobody wrote down, spoilage, mistakes on the purchase bill, or stock walking out of the back door. A restaurant whose recipes say 33% and whose shelf says 38% is losing 5% of its food sales, every month, to something it can find.
That comparison is the one worth running weekly. We go into what causes the gap in why your restaurant stock never matches.
What is a "good" food cost percentage?
There is no single right answer — it depends on what you sell and how you price it. A tea stall and a steakhouse live in different worlds. What matters more than hitting a textbook figure is:
- knowing your figure for each dish, so you can see which ones earn and which ones only sell;
- watching the trend month to month;
- keeping the gap between ideal and actual small.
Mistakes that make the number lie
- Using the menu price with tax in it. Take the tax out first.
- Forgetting wastage in the recipe. If you trim 10% off every kilo of chicken, the recipe should say so, or the dish looks cheaper than it is.
- Old ingredient prices. Chicken in March is not chicken in October. Cost recipes at what you actually paid recently — a weighted average of your purchases is ideal.
- Mixing up units. Recipes are in grams and millilitres; stock is bought in kilos and litres. One slip in conversion and a dish costs ten times what it should.
- Ignoring free food. Staff meals and complimentary dishes consumed stock. Record them, or they show up as unexplained loss.
- Counting stock badly. The monthly figure is only as good as the closing count.
Doing it without a spreadsheet
All of this can be done by hand, but it is slow, and by the time the spreadsheet is finished the month is over. A POS that keeps recipes does it automatically: every sale takes its ingredients off the shelf, the dish is costed at your real purchase prices, and an ideal-versus-actual report shows the gap per item.
In Sellify, recipes are entered in kitchen units, each line can say which order types it is used on (so the box only counts on takeaway and delivery), and the food cost reports read each dish per order type. See Sellify for restaurants, or book a demo and bring one of your recipes.